Legislature(1995 - 1996)

04/11/1996 08:20 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  SENATE BILL NO. 226                                                          
                                                                               
       "An  Act  relating to  biennial  registration  of motor                 
       vehicles; imposing biennial registration fees on  motor                 
       vehicles and authorizing a scheduled biennial municipal                 
       tax  on  motor  vehicles; relating  to  fees  for motor                 
       vehicle emissions  control programs; and  providing for                 
       an effective date."                                                     
                                                                               
  TOM  WILLIAMS,  STAFF,  SENATOR  FRANK  reviewed  amendments                 
  previously  adopted by  the  Committee  (see  House  Finance                 
  Committee minutes 3/29/96).   Amendment 1  was adopted as  a                 
  technical amendment to eliminate superfluous effective  date                 
  sections.    Amendment  3  was also  adopted.    Amendment 3                 
  provided that implementation  of biannual registrations  and                 
  biannual emissions testing  would begin  January 1997.   Co-                 
  Chair Hanley noted that this date would allow the Department                 
  time to implement the program.                                               
                                                                               
  Representative  Kelly   MOVED  to  adopt  Amendment   7,  9-                 
  LS1452\M.1, 4/9/96 (copy on file).                                           
                                                                               
  REPRESENTATIVE JERRY MACKIE testified on behalf of Amendment                 
  7.    He explained  that  the amendment  would  provide that                 
  registration at  a contract office  would not be  subject to                 
  the $10 dollar fee.  He pointed out that rural areas  of the                 
  State do not  have Division  of Motor Vehicle  offices.   He                 
                                                                               
                                2                                              
                                                                               
                                                                               
  stressed that it  is unfair for  rural residents to pay  the                 
  extra $10 dollar fee to relieve crowding in urban areas.                     
                                                                               
  Representative Martin asserted that those living in  smaller                 
  areas get  away cheaper  with personal  contact.   He  spoke                 
  against the amendment.                                                       
                                                                               
  Representative  Mackie spoke in support of  Amendment 7.  He                 
  asked  why  people  using  contract  offices should  pay  to                 
  alleviate congestion when  there is  no congestion at  these                 
  offices.                                                                     
                                                                               
  In  response  to a  question  by Representative  Therriault,                 
  Representative Mackie stated  that he supports the  fee when                 
  transactions  occur  at  Division  of  Motor  Vehicle  (DMV)                 
  offices.  He emphasized that the  State is trying to present                 
  incentives  for contract  agents  to take  over some  of the                 
  responsibilities that the  State cannot  support.  He  noted                 
  that  the  contract  agents  operate  through  local  police                 
  departments.                                                                 
                                                                               
  JUANITA HENSLEY,  CHIEF DRIVER  SERVICES, DIVISION OF  MOTOR                 
  VEHICLES,  DEPARTMENT  OF  PUBLIC  SAFETY  stated  that  the                 
  Department does not  support the amendment.   She noted that                 
  the amendment would set up two  different types of programs.                 
  She observed that rural communities  where DMV offices exist                 
  would have to pay  the fee even if  there is no  congestion.                 
  Other  rural  communities would  not  pay  the  fee  if  DMV                 
  activities are performed  by contract agents.   She stressed                 
  that the amendment would  not be fair for the  entire State.                 
  She clarified that contract agents  are not state employees.                 
  They are  city employees.   The  State pays  15 percent  for                 
  vehicle  registration and  50 percent  for driver's  license                 
  work to contract agents.                                                     
                                                                               
  Co-Chair  Hanley summarized  that  if  the  disincentive  to                 
  renewing licenses in person goes away it will cost the State                 
  more money.   Ms. Hensley  agreed and added  that the  State                 
  still has to perform paper and computer  work on collections                 
  by contract agents.                                                          
                                                                               
  In  response  to  a question  by  Representative  Brown, Ms.                 
  Hensley discussed HB 210.  She  noted that HB 210 would  not                 
  result in commissioned contract offices.  She clarified that                 
  a contract office opened  under HB 210 would be  exempt from                 
  paying the  $10  dollar  fee without  the  adoption  of  the                 
  amendment.    She  pointed out  that  commissioned  contract                 
  agents are  paid  by the  State  to perform  DMV  functions.                 
  Contract agents under  HB 210 and  emissions testing do  not                 
  cost the State.                                                              
                                                                               
  Representative Mackie emphasized that  commissioned contract                 
                                                                               
                                3                                              
                                                                               
                                                                               
  agents need incentives  to continue operation.   He observed                 
  that  reimbursements to  commissioned  contract agents  have                 
  been reduced due to the addition of the $10 dollar fee.   He                 
  stressed that the State would have to pay more to maintain a                 
  DMV office in small communities.                                             
                                                                               
  Ms. Hensley observed that some  commissioned contract agents                 
  are employed half-time.  She noted that a half-time position                 
  would cost DMV $18.0  thousand dollars.  The State  paid the                 
  Craig police department  $27,443 thousand dollars in  FY 96.                 
  The  commission  contract agent  in  Craig was  paid $19,644                 
  thousand  dollars.    She  estimated  that adoption  of  the                 
  Amendment  would  result in  a loss  to  the State  of $31.0                 
  thousand  dollars  and additional  operating costs  of $11.0                 
  thousand dollars to pay for contract additions.                              
                                                                               
  Representative  Martin noted that there is  a post office in                 
  Craig.                                                                       
                                                                               
  Representative Mackie  noted  that  there  are  commissioned                 
  contract  offices in  Craig, Wrangell,  Petersburg, Skagway,                 
  Dutch  Harbor,  Dillingham,  Naknek,  Barrow,  Anderson  and                 
  Seward.   Ms. Hensley noted that of 13 commissioned contract                 
  agents only five process vehicle registration.                               
                                                                               
  A roll  call vote was taken on the MOTION to adopt Amendment                 
  7.                                                                           
                                                                               
  IN FAVOR: Kohring,  Mulder,  Parnell,   Grussendorf,  Kelly,                 
  Foster                                                                       
  OPPOSED:  Martin, Therriault, Brown, Hanley                                  
                                                                               
  Representative Navarre was absent from the vote.                             
                                                                               
  The MOTION PASSED (6-4).                                                     
                                                                               
  Representative  Mulder  MOVED  to  adopt  Amendment   5,  9-                 
  LS1452\M.2 (copy on file).   He explained that the amendment                 
  would allow municipalities to collect  an additional fee for                 
  the ambient  air quality program to be  collected along with                 
  the motor vehicle emission control inspection fee.                           
                                                                               
  Mr. Williams noted that  the sponsor does not object  to the                 
  amendment.                                                                   
                                                                               
  RON KING, CHIEF, AIR QUALITY IMPROVEMENT SECTION, DEPARTMENT                 
  OF ENVIRONMENTAL  CONSERVATION observed that  the Department                 
  supports the amendment.                                                      
                                                                               
  Ms. Hensley  noted that the  amendment would not  affect the                 
  Department of Public Safety.                                                 
                                                                               
                                                                               
                                4                                              
                                                                               
                                                                               
  Representative  Martin spoke  against  the  amendment.    He                 
  asserted  that  the  municipality  makes   a  lot  of  money                 
  processing unnecessary paper.                                                
                                                                               
  Mr. King noted that both the Anchorage and Fairbanks have to                 
  recover the cost of their inspectors and programs.  He noted                 
  that the volume of vehicles in Alaska is small in comparison                 
  to the fixed cost that most be sustained.  He explained that                 
  of  the  $10 dollar  fee,  the vehicle  emissions inspection                 
  program costs a  little over $7.50  dollars.  The  remaining                 
  $2.50 dollars is attributed to the  air quality program.  In                 
  Fairbanks   the   emissions    inspection   program    costs                 
  approximately  $7  dollars and  the  air quality  program $3                 
  dollars.                                                                     
                                                                               
  Representative Brown read from a letter  from Tim Rogers, to                 
  Representative Mulder  (not on file).   She  noted that  Mr.                 
  Rogers  wrote    that  $295  thousand dollars  of  Anchorage                 
  emissions inspection  revenues are  appropriated to  the air                 
  quality program  as are required  match for a  $110 thousand                 
  dollar pass through grant from  the Environmental Protection                 
  Agency.                                                                      
                                                                               
  Mr. King explained  that the  Anchorage air quality  program                 
  was funded with approximately $295 thousand dollars from the                 
  general fund, as a  grant match to $110 thousand  dollars in                 
  federal  funds.  Four years ago, the general fund obligation                 
  was  reduced  through the  substitution  of the  $2.75 cents                 
  collected on  a per  car basis  in the  emissions inspection                 
  program.  He emphasized that  Anchorage fronted $1.8 million                 
  dollars to start the vehicle inspection program.  The  $2.75                 
  dollars  per  car was  being used  to  recover the  start up                 
  costs.   The  start up  costs were  not completed  recovered                 
  before the Anchorage  Assembly made  the decision to  switch                 
  the $2.75 dollars to the air quality program.                                
                                                                               
  In  response  to a  question  by Co-Chair  Hanley,  Mr. King                 
  agreed that the municipality will not  be able to charge for                 
  the air quality program without the adoption of amendment 5.                 
  He summarized  that there would be a  budgetary shortfall to                 
  the municipality of Anchorage of approximately $295 thousand                 
  dollars.  He noted that  discussions are occurring regarding                 
  the  State's  assumption  of Fairbanks'  inspection  and air                 
  quality programs.                                                            
                                                                               
  Co-Chair  Hanley noted that if  the amendment is not adopted                 
  Anchorage would have to increase property taxes to cover the                 
  cost of the programs.                                                        
                                                                               
  A roll  call vote  was taken  on the  MOTION on  adoption of                 
  amendment 5.                                                                 
                                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
  IN FAVOR: Brown,   Grussendorf,   Kelly,   Kohring,  Mulder,                 
  Parnell,       Therriault, Foster, Hanley                                    
  OPPOSED:  Martin                                                             
                                                                               
  Representative Navarre was absent from the vote.                             
                                                                               
  The MOTION PASSED (9-1).                                                     
                                                                               
  Representative  Mulder  MOVED  to  adopt  Amendment   8,  9-                 
  LS1452\K.10 (copy on file).  He explained that the amendment                 
  would exempt rental vehicles from  the two year registration                 
  requirement.    He  noted that  many  rental  companies have                 
  seasonal fleets.                                                             
                                                                               
  The  Sponsor and  the  Department of  Public  Safety had  no                 
  objections to Amendment 8.                                                   
                                                                               
  There being NO OBJECTION, it was so ordered.                                 
                                                                               
  In  response  to a  question  by Representative  Martin, Ms.                 
  Hensley  explained  that the  Anchorage  field office  has a                 
  fleet dealer unit that registers all vehicle fleets.                         
                                                                               
  Representative Martin MOVED to report HCS CSSB 226 (FIN) out                 
  of Committee  with individual recommendations  and with  the                 
  accompanying fiscal note.                                                    
                                                                               
  Representative Brown  OBJECTED for  purposes of  discussion.                 
  She  asked  how the  fiscal note  would  be affected  by the                 
  adoption of amendment 7.  Ms. Hensley noted that there would                 
  be a operating cost under  contractual of approximately $5.5                 
  thousand  dollars.    There would  also  be  a  loss of  $31                 
  thousand dollars in revenues.   Discussion pursued regarding                 
  the  fiscal  note.    Co-Chair  Hanley  estimated  that  the                 
  contract  costs  would  show  a  slight savings,  while  the                 
  revenue lost to the State would be 85 percent of 10 dollars.                 
  Ms. Hensley noted that if 50 percent of those that are using                 
  the mail now  choose to  go back into  the contract  offices                 
  that  the  Division would  need  an additional  $11 thousand                 
  dollars to pay the commissions.                                              
                                                                               
  (Tape Change, HFC 96-111, Side 2)                                            
                                                                               
  Discussion  regarding the fiscal  note continued.   Co-Chair                 
  Hanley  summarized that  contract  offices  would also  lose                 
  revenues.  He asked for an updated fiscal note.                              
                                                                               
  In  response  to  a question  by  Representative  Brown, Ms.                 
  Hensley  pointed out  that  half  of  the vehicles  will  be                 
  registered the  first year in a  two year basis.   The other                 
  half would be registered in the next year.  There will be an                 
  increase  in  registration fees  the first  two years.   The                 
                                                                               
                                6                                              
                                                                               
                                                                               
  legislation also contains  a reduction of  $2 dollars for  a                 
  two year  period.  This  is shown in  the future years  as a                 
  revenue loss.                                                                
                                                                               
  Mr. Williams noted  that the  $2 dollar break  was given  to                 
  provide  an incentive.  Representative Brown maintained that                 
  the $2 dollar  reduction is  an unnecessary  loss of  future                 
  income.  She  stressed the convenience of  registering every                 
  two years.                                                                   
                                                                               
  Ms. Hensley noted that there would  be a savings in postage.                 
                                                                               
                                                                               
  Co-Chair Hanley  asked if  there would  be  decrease in  the                 
  workload.   Ms.  Hensley noted  that 60  percent of  vehicle                 
  owners mail  their registration.   She  emphasized that  the                 
  legislation  will   allow  the  Division  to   operate  more                 
  efficiently.  She estimated that  the legislation will allow                 
  lines at DMV offices to be smaller.                                          
                                                                               
  Representative Brown reiterated concerns with  the $2 dollar                 
  reduction.                                                                   
                                                                               
  Representative Martin WITHDREW  the motion to move  HCS CSSB
  226 (FIN) from Committee.  There  being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  Representative  Brown  MOVED   to  delete   the  $2   dollar                 
  reduction.   Representative  Martin and  Mr.  Williams spoke                 
  against the amendment.   A roll  call vote was taken  on the                 
  MOTION.                                                                      
                                                                               
  IN FAVOR: Brown                                                              
  OPPOSED:  Mulder, Therriault,  Grussendorf, Kelly,  Kohring,                 
  Martin,        Foster, Hanley                                                
                                                                               
  Representatives Navarre  and  Parnell were  absent from  the                 
  vote.                                                                        
                                                                               
  The MOTION FAILED (1-8).                                                     
                                                                               
  Representative Martin MOVED to report HCS CSSB 226 (FIN) out                 
  of Committee  with individual  recommendations and with  the                 
  accompanying fiscal note.                                                    
                                                                               
  HCS CSSB 226 (FIN) was reported out of Committee  with a "do                 
  pass" recommendation  and with a  fiscal impact note  by the                 
  Department of Public Safety.                                                 

Document Name Date/Time Subjects